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00:31:00

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Kaiser 4, The City 2, Lisa Gut Be 1, Data 1, Hue Hewitt 1, Northern California 1, California 1, Marina 1, Neale Coacher 1, Utilization 1, Ferrel 1, Dr. Payton 1, Uhs 1, Lab 1, Heche 1, Utilizeers 1,
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  SFGTV    [untitled]  

    December 4, 2013
    4:30 - 5:01am PST  

4:30am
love. there are many that members particularly love. there is where you can do less of this because we arbitrarily decided it needs to be an x personal of the rate which is not the way we should go. we should look at the overall rate. i want you to look at what's been reported already by all hospitals and hospital acquired infections are publically reported by all hospitals. >> is there a particular site for that? >> yeah. i'm not sure whether it's federal or state website. i don't really go look at them. they are just reports. >> i believe it's the website. i heard they are limiting that website. we may ask the board of supervisors to put pressure
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on the state because the public scrutiny of that data is really important. we'll get back to you on that. >> any other comments? public comment? seeing none, all right. item no. 9. >> the clerk: discussion item question the blue shield's calculation. >> lisa gut be. i'm going to accept set up the questions. one of our unions is looking at the rates and benefits process as the question of hsf regarding the rate setting process from the 2013 and he basically was asking about how was the pricing done and
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concern that maybe we overpriced 2013 and so i thought the best way to answer that question was how to actuary through the health service board address the question and -- kosher. >> okay. neale coacher, hue hewitt. you have in your packet 2013-2014 rating. i even have an executive summary. can you hear me okay ? the question relates to the way trends are applied to calculate 2013-2014 premium equivalence. in this presentation to analyze the use of the blue shield renewal presented at the health services board will be
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reviewed. i actually have that page as the very last page of this document. at that time, i don't mean to go all the way to the end. we pointed out the medical spin we projected for the earlier data in 2013 was determined to be 56815 and because of the incredibly good work of the aco's we can actually 1 year later because we had more information bring that down which means we actually did not increase the rates for 2014 because between that point in time, and the point in time whenever we rated for the subsequent period data improved, trim lines improved and we took a leap of faith and put a zero through. >> you recall the board gave us extra time to add additional data as we made the projections. we were making
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those projections on a very small monthly utilization. >> anyway, when we set the rates for 2013, i have in graphic actuarial detail on page 2 to explain exactly how we got where the data set came from, the amount of money we were talking about. what it equates to that we implied an 05 trim and we presented to the board and approved by the board and we have some nice numbers for this year. all of the math, i won't go to all of it, equates to 56815. that is through april 2011-march 2012. we go another year forward and use the next year's data and start trending for it with more current information, standard
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underwriting principals and standard underwriting approach. with that being said sorry about that i will have to turnover. we go to the next page and from march to february. we did lots of linear aggression on your behalf. i brought the chart for everybody's review. you were comfortable with this at the time and we projected a number to the $555.43. i won't elaborate but everything is based on actuarial principals and they stand all the task and we are not going to charge your population anymore money in 2014 and your trust fund has money to pay claims. with that being said, any questions? >> you look like you want to ask questions. >> this is not a question. it's
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a comment to both the employers that we negotiate on behalf as well as to the unions and that is had we not subsidizing the rates and preserved families in blue shield we wouldn't have such good utilization data. the message to the unified school district and the union county in those employers we must engage in contribution methodology that preserve healthy people in blue shield. that is what determines the blue shield rates and for that kudos to lisa and marina in terms of working on our contribution and the other unions have accepted that
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contribution model. if we are going to ri main competitive, and kaiser competitive, the unions must accept the contribution models. >> any other comment? any public comment? item 10: dashboard. >> an an alytic managers system. the dashboard system today is a series of on going support of various health plans. today we'll look at our
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city plan through 2013. we'll be looking at the merging cost and auto utilization for our active and retirees. the majority of the participating city plan are in the retirement program. the numbers look very good for this group of folks. in contrast, the membership has decrease in our active early retiree pools and those that have either catastrophic illness and those with no other options live outside of the blue shield or kaiser service areas. so, what we've done with this particular dashboard is really conducted a deep dive in our areas of concern. so to that end we are not looking at
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necessity depth of our retirees. our areas will look at the areas of concern in the active city plan as well as our early retiree. in the report contents, again we'll be looking at our claims and auto evasion -- utilization for inpatient and outpatient and numbers that we do in the dashboard and we have that separate analysis where we have separated out the heche population to use as a comparative and some notes about the report which everything is reported on a basis and any of the increase percentages we provide in the dashboard. at this point i'm going to turnover the presentation to my colleague.
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>> good afternoon, dr. payton. members of the commission, supervisor ferrel. what i would like to do today is give you an update since i was last here about a year ago. first we'll talk about act ifs and then move to early retirees. if you look at the graph i think it's quite visually noticeable that there is a downward trend. what you will notice is that the active rate has been reduced 20 percent. the active membership should they trend continue is projected to be less than 100 members by 2015. of those 700
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members 70 are heche members. just to put in perspectives with those numbers. with the declining trend you are seeing an increase in age. what i will notice is that the city plan is
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a ppo model, a preferred provider organization which is a health maintenance organization. but even given that difference you will notice there is an almost that the cost on a member per month basis is twice blue shield and even more on the part of kaiser. and you will also notice that if you compare the two groups that you will find that the city plans on an annual basis it's not an end point basis. blue shield is 37 and kaiser is 35. what that does if you are looking at a demographic factor rating whereas 20 is a 1, 40 is a 2, you will see that the city plan because of their age,
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their demographic factor applied to the rate is 2.29 versus kaiser which is 1.56 because of the cost in the age. this is a very significant issue. what you also noticed even with that, in spite of the decreasing membership that cost continue to grow year over year 13 percent last year which is above the national trend. moving on to page 5, here what we are looking at is the total cost per member per month, what we are looking at you will see the city active per member cost increased about 7.5 percent from 2008-2013. the drug cost
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alone increased 100 percent where as the average drug increase is about 15-17 percent and the city plan at about 22 percent -- annual increase of 37 percent or higher. the heche population cost for inpatient and outpatient. that will be if you are looking at your colored chart, the orange and tangerine. i'm not good at colors. art is not one of my fortes. their inpatient and outpatient cost are only 248 versus 727 for all. so, again they are not only younger, they are not utilizeers. moving on to page 6. what you will see here is looking at the admits per thousand. there has been a decrease in the rate of
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admits moving from 83.2 percent to 65.2 percent. i'm sure doctor will agree, 83.2 percent is a high average. given it's a ppo model, you watch it. however, one of the things that is noted is that because of the low membership, you have a lot of variability in the rates from year to year. and that's why you see some variability between reporting periods. one of the things again drawing out . heche just to add to the discussion had no admits in the
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last 3/4. >> on slide it should be 65.2. >> yes. i'm sorry. there was an error. >> these are admissions into the er. if we move on to page 7. 9 days per thousand. this
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again is reflected of the small enrollment, but if you compare it to your other two health plans, you will notice that blue shield is at 169 and kaiser 185. so what does that mean? if you would set uhs is the baseline, you would find if they would make blue shield the baseline, you would expect them to be about 300 admits and kaiser about 280. they exceeded even if they are one. they are above and beyond what you would predict for utilization. now as far as the average, as you
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remember, uhs is a length of time of average length of stachlt -- stay. it's 6.5. it far exceeds the norm for northern california, in the sense that it's usually expected to see it under 5. we did want to point out but just in passing because we don't know the amen of the maternity for individuals. this was surprising the age is 48 so you would expect higher risk pregnancies which means longer days of stay. we don't know the age of the people that had the babies. we can't say much. again, looking at heche which is what you would expect having admits in 3 of the four last quarters. their average stay is
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under one day.1 day. moving on to page 9, what is the total cost per day. it's 42 percent per year. this corresponds to 75 percent of that cost increase due to several high cost claimants. as you can see you have one that's almost $500,000, another slightly over $300,000, one about $300,000 and the last one for $120,000. what that results is that the average cost per day because of these high cost claimants and small numbers is about $96 hundred whereas if you look at
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heche alone is 2581. >> it's hard to compare heche to the rest of the population accessibility is a big issue than just the population in general. >> it's interesting, thank you for the segway because if you look at outpatient survey you know that heche has higher rate outpatient. a use of outpatient service is more cost-effective. what we want to point out is as you noticed the trend line is slow moving. it's not a great deal. emergency rooms have increased about 12.6 percent and emergency visits about 8.5 percent over the past 5 years.
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moving on to the professional procedures per thousand. one of the things we want to do is start out with what the benchmark is for a professional procedures. this is office, lab, all types of things that are billed on the outpatient side. you would expect to see about 15 different types of services per person or 15,000 per thousand members. what you see for the city plan is that they are about two times that in 29200. of those 19,000 of these services were coded as other. it's not worth a lot of money, it's about $5 per member per month. what we are looking at is they are supplies, alternative care services and lab and one of the things we are doing is exploring more
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with uah on how they code and how they count because that is something we need to bring back further information to you. lastly on the generic drugs. i'm not quite done. what you see is that as the generic substitution rate has grown by 22 percent over the past 5 years and for ppo it exceeds 74 percent, that is a wonderful number. you have to give yourself credit because you did make some plan designs in 2009 and 2010 that caused the increase in the general -- generics. you saw the results of the plan action. moving on to the cost on a per month basis. the cost have increased to 7.7 percent in the last year. the industry trend is
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about 4-5 percent. as you noted, you looked at the charts on the right hand side of the page, that the city plan is again somewhere slightly about double to just slightly under double either what blue cross or what kaiser spent for their pharmaceuticals. we did look at what is causing this and you will notice that you have a lot of the antivirals, you have other hormones which is hormone used to address hiv with, you have the anti-any -- plastic and that is the narcotics and 25 percent. >> can you identify anti-plastic? >> it's the anticancer drugs.
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>> cord -- according to the heart association, the drug stat ins, basically calling this a great big farce. i think i have said it here before, the pessimistic meta induction theory, where in science, scientific method everything we know today will be over turned tomorrow and everything should be taken with a grain of salt. if you make this your paradigm that paradigm will change and it's a huge increase to the pharmaceutical industry. people that are on stat ins shouldn't be on them. yes, doctors will read the guidelines and say,
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now this doesn't matter, this matters. your age associated. what that is going to generate is more doctor visits and more pharmaceutical visits. people that take these stat ins, 30 percent of people get side effects and no shown benefit to the people taking the drugs that are now on the drugs. i'm pissed about these guidelines. i think that we are going to medicalize and put a lot of people in harms way that don't need to be. these are things that start in california and go nationally. i think we may want to take the point of view on how we think about these guidelines that are contrary to the guidelines themselves. i don't want every doctor to say that's what i'm going to do.
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because the medical journal came out and there is a big thing that came out in jama and it talks about the effects of sugar and cardiovascular disease. we have to figure this out. i just fear that these numbers going up here, they are going to sky rocket in the next few years on drug cost and er cost and all the cost that are going to be generated by something that wasn't needed. i'm just putting this commission on notice that i'm going to be doing my homework and i'm pretty upset with these guidelines. >> okay moving on to early retiree. you will see a similar graph that i drew on page 15
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with the early retirees on the city plan. so membership has decreased here at a rate of 15.6 annually. the average age is on the increase about 2 years over a 5-year period and that is because there are new people coming on and a lot of the older people are leaving the plan. moving on to page 16, they are still higher than you would expect in both kaiser and blue shield. but they are not double, they are 26 percent higher. the rates have gone down with the diminishing population. looking at the dhart -- chart on the right you will see the demographics
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are pretty similar on all plans. moving to page 16 on the cost per month. the overall total cost per month per month have increased annually and decreased lightly since 20 11 for an average decrease of 2.25 percent. of that pharmacy is about $112. moving on to page 18. first what we want to do is pull out each of the portions of the pie for the early retiree. what you will notice the facility cost per month has increased by 8.9 percent since the last time i was here. however the portion of the pie that the inpatient facility represents has increased 5 percent going up now to 39
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percent. again, we see that the inpatient cost continues to rise as the cost per day and over all the outpatient and professional cost have decreased leading to an over all decrease in the total premium or total cost. looking at the admits per thousand what you will see is they have decreased to 109 per thousand or 13.5 percent. if you remember the actives are at 414. and remember the higher age and the city plan is about 36.3 percent higher than blue shield and 37 percent higher than kaiser on the risk adjustment basis. >> the overall decrease since q
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12011, that's the high point. you could have picked any other point and they could have been increased if they could have picked q 2, 2010? >> yeah. but if you would draw a line particularly since quarter 2009. it has been pretty stable. yes, you are right but we did have a dry point to reflect a change in population as well as a change in activity to justify the cost. >> okay. thank you. >> on page 20, the city plan per thousand has